Germany’s Ifo index of business sentiment meantime hit its best level since June.

The European Central Bank surprised analysts by saying 278 banks in the single-currency zone will repay €137 billion ($184bn) of their 3-year LTRO loans next week, nearly two-thirds more than expected.

“It now seems that the stronger tone in global equity markets, coupled with a notable easing in European and US market tensions, is leading to short-term pressure on gold,” reckons INTL FCStone analyst Ed Meir.

“We think it will continue for a little while longer, given that negative chart picture[s] are also contributing to the sloppier tone.”

Also looking at gold price charts, this week’s “failure to make a new high…is bearish,” says bullion bank Scotia Mocatta, pointing to $1625 as the “next level of support.”

Barclays’ technical analysts think a “pullback” to $1640 is now likely, following Thursday’s finish in US gold futures beneath $1675.

Despite stronger-than-forecast US economic data, however, “Accommodative [monetary] policy is still expected to remain in place for some time,” counters London market-maker UBS, “a scenario that continues to be conducive for higher gold prices.

“[Gold’s] recent pullback should be viewed as an opportunity to pick up metal at more attractive levels.”

On the currency markets Friday, the British Pound fell to a 5-month low against the Dollar and a 13-month low against the Euro after new data showed the UK economy shrinking 0.3% at the end of 2012.

That capped the drop in Sterling gold prices to £5 for the week at £1056 per ounce.

The quantity of gold bullion held to back shares in the world’s biggest gold ETF trust fund – State Street’s GLD – shrank again on Thursday, down another 3 tonnes to 1331.7 and now 1.7% smaller from mid-December’s record holding.

Silver backing the iShares Silver ETF – the SLV – extending this week’s contraction to 237 tonnes or some 2.2% of the total.

That is “still well under half” of last week’s addition however, notes Bloomberg News.

“We used to watch Comex [futures contracts] open interest,” Bloomberg quotes Bernard Sin at Swiss refining group MKS in Geneva, “but now everybody looks at ETF holdings to give a clear signal of investor interest.”

Over in Asia, meantime, China is “now clearly the largest global consumer of gold” – overtaking India at last – says the latest Commodities Weekly from Natixis.

Analysts at the French investment bank and bullion dealer point to the latest available import and mining-output data available from the world’s top two gold buying nations.

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

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